Saturday, July 30, 2011

Putrajaya deeply unhappy with PwC Malaysia

Perhaps this is what is running through the minds of Chin Kwai Fatt & Co at the moment; how to control the damage from the tweets that poked fun at Premier Najib so that the status quo can be maintained.

Lets take a quick look at the various positions held by the Chairman of PwC Malaysia, Datuk Seri Johan Raslan.

"Government appointments: Board member of Putrajaya Corporation; member of the International Advisory Panel of the Labuan Financial Services Authority ('LOFSA'); member of the Securities Commission of Malaysia's Corporate Governance Consultative Committee; board member of Kumpulan Wang Persaraan (Diperbadankan) ('KWAP'). He was previously chairman of the Malaysian Financial Reporting Foundation ('FRF'), the body which oversees the Malaysian Accounting Standards Board. During his tenure at FRF, the decision was made to converge Malaysian accounting standards with International Financial Reporting Standards by 2012.

Accounting profession: President of the Malaysian Institute of Certified Public Accountants; Council Member of the Malaysian Institute of Accountants; member of Global Public Practice Committee.

Other appointments: Chairman of Institute of Corporate Responsibility, Malaysia ('ICRM') - a network of companies committed to advancing responsible business practices - ; member of the board of the Kuala Lumpur Business Club; member of the Board of Trustees of the Tun Suffian Foundation; Adjunct Professor of University of Malaya; Trustee of the Sultan Azlan Shah Foundation; Eisenhower Fellow."

This is just the list for one person in PwC Malaysia, albeit one of the top people there. But it does serve to illustrate how extensively Chin Kwai Fatt & Co have built their network into the financial reporting, auditing and regulatory frameworks in this country. None of this will be possible if Putrajaya no longer views PwC Malaysia as the go-to-guys, as they are today.

A fraudulent intent, however carefully concealed at the outset, will generally, in the end, betray itself.Titus Livius

Has the fraudulent intent that PwC Malaysia has, finally been exposed for all to see. That their courtship of the movers and shakers in Putrajaya, and the various government investment arms, was sheer hypocrisy, hiding their disdain for the ruling government?

There are lines that cannot be crossed when the status quo has to be maintained. Poking fun at the Prime Minister is definitely one of those lines, and the only way PwC Malaysia can outdo themselves now, is if there are also tweets by their people poking fun at the King.

This is a betrayal of trust by PwC Malaysia towards the ruling government, despite the many GLC's and government projects for which they were allowed to be auditors and consultants. And the rumble is that Putrajaya is deeply unhappy with PwC Malaysia after the latest revelations.

VU Kumar (2nd from right) and Chin Kwai Fatt (1st from right). Will VU Kumar be able to show his face in Putrajaya after his tweets?

The government has stood by PwC Malaysia, despite their interference with the regulatory framework in the country, despite the many allegations of fraud against Chin Kwai Fatt & Co, despite the contemptuous submission of doctored documents to the justice system, but can Putrajaya continue to stand by and allow PwC Malaysia to get away with all these and more, when they actually bite the hands that feed them?

There comes a point in time when the necessity to maintain the status quo is outweighed by the damage that the status quo can inflict. With the ETP under Premier Najib gaining traction, can Putrajaya continue to take the risk that comes hand in hand with the name of PwC Malaysia?

We have seen how DRB-HICOM has learned that it is better to drop PwC Malaysia than to continue oblivious to the baggage they bring to the table.